Snap Inc. (NYSE:SNAP) missed Wall Street’s expectations for its second quarter as a public company. The company’s net loss ballooned to $443 million, much higher than the $116 million loss reported at the same time last year. On an adjusted basis, the company reported a loss of 36 cents a share, versus predictions of a loss of 33 cents.
Snap also fell short of expectations for revenue. The company reported revenue of $181.7 million, versus expectations for $185.8 million. The company’s “other” revenue was $5.4 million, down from $8.3 million in the previous quarter. However, the company grew its average revenue per user to $1.05 from $0.50 in the same quarter a year ago.
Snap gained 7 million new daily users during the quarter, lower than analysts’ expectations of an addition of 10 million. The user base grew by 21 percent over the past year to 173 million. Every Snapchat daily user creates more than 20 messages daily on average. According to the company, 25 percent of people in the US, UK and France with smartphones use Snapchat every day.
The company added 4 million additional new users in North America. The region continues to be the world’s largest and most valuable ad market. 81 percent of Snap’s second-quarter revenue came from North America.
Snap also reported disappointing earnings in May, its first as a public company. Rivals have begun copying the innovative features that once set Snapchat apart, causing its growth to slow. Facebook’s photo-sharing app Instagram and other Facebook apps that have copied Snapchat’s main features have been growing more rapidly than Snapchat. As Snap’s user growth continued to slow, investor doubts began to set in.
Snap shares fell by more than 12 percent after the company released its earnings report. Its stock has now plunged well below its $17 public offering price. Employees will be able to sell their shares on the public market for the first time next week. Evan Spiegel, a chief executive and founder, and his cofounder, Bobby Murphy, will not sell shares this year, according to Mr. Spiegel’s statement during a call with analysts.
Since its highly anticipated initial public offering earlier this year, Snap’s stock has fallen considerably. Before its I.P.O., the company consistently reported losing money and made no guarantee that the losses would subside. For a few months, Snap’s stock stayed above its I.P.O. price, even rising to early highs above $29. The shares are now hovering around $13.